Bull's-eye for Target, city

Retailer to open in old Carsons building

February 16, 2011|By Sandra M. Jones, Tribune reporter

Target Corp., the pioneer of cheap chic, is set to make its debut in Chicago's Loop, cementing State Street as a boulevard of bargains.

The store, called CityTarget, is slated to open next year at the landmark Sullivan Center at 1 S. State St., where Carson Pirie Scott & Co. had operated for more than a century. Carsons closed its flagship department store in 2007, leaving a prominent void at the busy corner of State and Madison streets.

The discount chain's new urban format is smaller than a typical Target store and will stock fresh food, apartment essentials and clothing. The deal gives Target a foothold in the heart of downtown Chicago as the retailer looks to expand into the nation's cities. The city, for its part, achieves a long-standing goal to bring a grocer to the Loop to serve the office district's growing residential population.

"Target will be a big traffic generator," said Paul Vogel, principal at Realty Development Research Inc., a Chicago-based retail real estate consultant. "It sells things people need on a regular basis, and it will bring in a lot of people who will also shop somewhere else on the street."

Target plans to lease 124,000 square feet over two floors but will dedicate only 54,000 square feet as the selling floor, said Amy Reilly, spokeswoman for the Minneapolis-based retailer. The rest of the space will be used for employees, loading areas and storage, she said. The average Target store is 135,000 square feet, including about 100,000 square feet of selling space.

The store is slated to create about 200 jobs.

"The core of the city is the key," Mayor Richard Daley said at a news conference Tuesday amid the ornate columns in the otherwise empty first floor of the Sullivan Center. "If you don't have a core of a city, most cities fail."

Target has been in talks with the city and the Sullivan Center's owner and developer Joseph Freed & Associates for more than a year. The agreement marks Target's 11th store in Chicago and its fourth urban format store in the U.S.

Last year, Target signed deals to open a 70,000-square-foot store in Seattle, an 85,000-square-foot store in San Francisco and a 100,000-square-foot store in downtown Los Angeles. Those stores are scheduled to open in 2012.

The city has poured $24.4 million in tax increment financing over the years to help restore the Louis Sullivan building. Freed has poured an additional $190 million into the center, which spans 1 million square feet and includes office space. The School of the Art Institute, the Illinois Department of Employment Security and Walgreen Co.'s e-commerce division are among the office tenants.

Shoe store DSW Inc. and New York's City Winery — a dining and music venue where urban wine enthusiasts can make their own vino — are in talks to join Target as tenants at the Sullivan Center.

Larry Freed, president of Chicago-based Freed, declined to comment on the talks but said there are several leases pending that, when signed, would bring occupancy at the center to 84 percent.

The Sullivan Center's status as a national and Chicago historic landmark means Target will have to restrict its signage. Target has yet to submit its signage proposal to the city for approval, said Molly Sullivan, spokeswoman for the city's Department of Housing and Economic Development.

Target has yet to work out what to do with its brand name and bull's-eye logo, but there is talk of drawing attention to the store by putting signature Target red awnings above the windows. Target's creative team is also working on dynamic signs inside the picture glass windows that front State Street.

"We look forward to preserving this Chicago treasure and blending in with the building's aesthetic," said John Griffith, executive vice president of property development at Target. "A hallmark of Target is our flexibility in store design."

While not a landmark issue, electronics superstore Best Buy scaled down its brash neon yellow price tag marquee when it opened in the John Hancock Center on North Michigan Avenue in 2009 to appease the tony merchants on the street.

Target opened its first Chicago store in 1993. It plans to open its 12th city store next year at 1101 W. Jackson Blvd. at the site of a shuttered Fannie May candy kitchen, Reilly said. Target also operated a pop-up, or temporary, shop for three days in 2009 called Bullseye Bazaar on North Michigan Avenue.

Wal-Mart Stores Inc., Target's chief rival, opened its first Chicago store in September 2006 in the Austin neighborhood amid a swirl of controversy. As the world's largest retailer and the nation's largest grocer, Wal-Mart has faced the ire of organized labor, which has used its political influence to keep the discount chain out of the nation's inner cities.

Employees at traditional grocery stores, including Supervalu Inc.'s Jewel-Osco and Safeway Inc.'s Dominick's, are union members. Workers at Wal-Mart and Target aren't organized, but as the smaller retailer by far, Target has managed to fly under the radar. In the wake of the recession, Wal-Mart finally won city approval in 2009 to open more stores in Chicago and has two stores in development on the South Side.